tv The Profit CNBC November 30, 2015 9:00pm-10:01pm EST
were sharks wearing socks. [ laughter ] i don't know if they were sharks. well said. a quick-service lobster-roll tonightrestaurantrofit," brings the flavors of new england to the streets of chicago. j: enjoy, so much. lemonis: the owner has mastered the menu... i love the concept, and i love the fact that people are lining up to go there. ...but messed up almost everything else. isaiah: you just blew it and they're not gonna order from us again. lemonis: i'm gonna tell you right now, it's [bleep] up. his irresponsible spending is squeezing the business. meals and entertainment -- $25,000. so you're running it through the business? and his family is tired of footing the bill. j: [ voice breaking ] i want to make this big enough where i can repay him somehow. lemonis: if i can't get him to follow my plan, this company will go under. it's [bleep] up. my name is marcus lemonis, and i risk my own money to save struggling businesses.
we're not gonna wake up every morning wondering if we have a job. we're gonna wake up every morning wondering how many jobs we have to do. it's not always pretty. everything's gonna change -- everything. but i do it to save jobs, and i do it to make money. this... let's go to work. ...is "the profit." ♪ chicago, illinois, is home of "da bears" and, more recently, da lobsta. da lobsta is a quick-service restaurant started three years ago by j wolf. the traditional lobster roll is, by far, our most popular item. lemonis: j exploited a void in the market and achieved initial success, expanding into three storefronts and a food truck that covers the entire chicago area. but those three locations turned to two when his landlord sold the site of his flagship restaurant, and now j is feeling pinched. but even with a smaller footprint,
da lobsta has a loyal following and i'm excited to help take it to the next level. the food-truck business is very competitive in chicago, so i decided to head downtown and see how da lobsta stacks up. hey. -j: hey, marcus. -lemonis: how are you? -are you j? -j: nice to meet you. i am j. lemonis: i'm marcus. nice to meet you. do you mind coming out to chat? j: absolutely. lemonis: so is this the primary business right here? j: well, i had three brick-and-mortars. one of them we had just to close. the landlord sold the building for development. i'm now down to two, and then the food truck is a supplement to all that. lemonis: how much revenue will you do on a day like today? j: i'll do anywhere from $1,500 to maybe $2,000. lemonis: right here on the street? j: yeah, i'll do more in the truck in two hours for lunch than a restaurant will do all day. lemonis: okay. i like the business model of the food truck because of the portability. you can do high volume in one area for lunch, and then move it and do even more volume somewhere else for dinner. but if j's truck is generating more revenue in two hours
than one of his restaurants all day, then i'm wondering why he would even have the storefronts. -can i take a look inside? -j: absolutely. lemonis: what's happening, guys? -man: what's going on? -lemonis: i'd like to actually learn how to make a roll. j: you take your bun. lemonis: so you're just doing this deal? j: yep. -lemonis: put it on the griddle? -j: yep. one thing i stress to everybody is we have a very visual product. presentation is everything. it's a $12.95 sandwich. not only does it taste good, it needs to look good. lemonis: i'm ready to work. there you go. j: marcus-made. lemonis: now, it goes without saying that before i invest any money in any business, i need to have confidence in the product. -i love the concept. -j: thank you. lemonis: the bread was nice and soft. -the lobster meat -- great. -j: thank you. lemonis: why'd you start the business? j: when i was in l.a. in 2008, i pursued opening my own bar-restaurant. lemonis: where'd you get the money to open that? j: my dad gave me my part. he lost a little over $300,000 when it was all said and done. i was having partner issues. that was back when i was living in l.a. and trying to be the l.a. lifestyle.
lemonis: so what does that mean -- "living the l.a. lifestyle?" j: everyone has to have a bmw, an audi, nicest clothes, go to the nicest restaurants. lemonis: were you living that lifestyle? -you were spending money? -j: yeah. lemonis: why'd you start this business? j: because i was so frustrated with that business, but i knew i still loved the food industry. lemonis: how much money did you invest to start this? j: so the original investment was $185,000. -that came from my grandmother. -lemonis: from your grandmother. what did you do with that $185,000? j: we built the first store in gold coast. -lemonis: the one that closed. -j: yes. lemonis: so that money that went into that is gone -- -the buildout. -j: the buildout, yes. lemonis: none of your own money went into it. j: no, i don't have any. lemonis: i always want people to have skin in the game, and it's a little bit of a red flag when i find out that j hasn't put a single penny of his own money in the business. well, now that i've seen the food truck, i want to understand what the brick-and-mortar locations are operating like. -it's a nice spot. -j: thank you. lobster chandeliers. lemonis: yeah. how you doing?
-isaiah: i'm isaiah watkins. -lemonis: i'm marcus. how you doing, sir? so are you the head man in charge here? isaiah: one of the guys in charge. lemonis: can you give me a little tour? all right, so, front of the house right here. we got soups over here, as well. lemonis: did you make this soup? isaiah: we say we make it, but we don't make it. lemonis: you say you make it, but you don't? isaiah: no, we don't. lemonis: and so why do you tell people that you make it if you don't? j: i just try to be vague as to where it is. like, it's a "home recipe," doesn't say "homemade". lemonis: j is trying to trick people into being convinced that his soup is "homemade." i wonder what he's trying to trick me about? can you show me the back of the house? how you doing, sir? -carlos: carlos. -lemonis: carlos? i'm marcus. nice to meet you. j: carlos is the kitchen manager. lemonis: who do you report to? -carlos: isaiah. -lemonis: isaiah. you guys get along pretty good? isaiah: yeah, sometimes. lemonis: sometimes? why not all the time? isaiah: the problem is the last time me and carlos got into an argument -- we have a $400 order in the morning. these people are expecting their food at a certain time -- on time, and guess what?
if you ruin their lunch, you just blew it and they're not gonna order from us again. so what happens is i'm fittin' to start getting this order and i'm fittin' get this order out. lemonis: so you back here cooking? -lemonis: yeah. -nicholas: when i was brought here, nobody told me the chain of command. they just told me, "hey, well he's the kitchen manager. he comes off as a jerk sometimes. lemonis: so give me an example of, like, what that looks like. nicholas: "uh, yeah, i should just fire everybody. and just, winter times come, it's gonna slow down, so it's just gonna be me in front." j: but i also told you a few weeks ago, face-to-face, that nobody will be fired in this kitchen without me being the one to do it. lemonis: you say to him, "nobody's getting fired without you knowing about it." that's like basically saying, "i don't give a [bleep] what he says." what kind of authority does he have now? -zero. -carlos: zero. lemonis: the chain of command is important, especially in the restaurant business, but it also has to come with respect. and that's all you're asking for. all right, so you guys got to work on that. we know that j's the owner. he own's 100% of the business, right? j: no. lemonis: what do you mean, "no"? j: no, i have partners in the business.
i own 52% of the business. lemonis: really? can we sit by ourselves and just go over some -- -j: i have an office downstairs. -lemonis: oh, you do? oh, yeah. how much money has been put into this business overall? your father's original investment was $300,000? j: my father gave me money for my first investment, which went south. -i gave him 10% of this company. -lemonis: but you got -- you started this business with your grandma's money. j: she gave me $150,000. -lemonis: $150,000 or $185,000? -j: $150,000. my sister put $35,000 in and i gave her 15% of the company. lemonis: okay, so how much does your grandmother have? j: zero -- all she asked is that i pay my father back at some point. and then i have a partner. his name is dan. he has 23%. lemonis: that leaves you with 52%. how much debt? j: i'll show you right now. lemonis: do you have the financials printed out or anything, or no? -j: no. -lemonis: but don't you -have financial statements? -j: yeah. i don't know how accurate they are. lemonis: i don't know what rock j's been living under, but he contacted me.
i don't need him to have, like, the most beautiful presentation, but how about having a printout that has your balance sheet and your financial statement? j: here's where we stand right now. lemonis: you owe $120,000 in sales tax? -j: yes. -lemonis: that's past due? lemonis: sysco -- you owe $55,000. $140,000 in internet loans. square loan -- that's another loan. -that's $40,000? -j: yes. lemonis: what's bill? j: bill is my wife's grandfather. lemonis: how much is that? $26,000? -who's debbie? -j: debbie's my sister. she also gave me some money as a loan. lemonis: so you owe her $20,000. -dan -- you owe him $30,000. -j: yes. lemonis: so that's $431,000 in debt. so you borrow money from family. you borrow money from the government by the taxes. you borrow money from sysco. if this business doesn't get real cash, i don't know how it survives. if da lobsta closes, you got a lot of issues. all the employees are out of jobs, the city comes after j personally for the past-due taxes, and j's grandmother, j's father, j's sister --
they all lose their money. it's bad news -- real bad news. if you don't have a job, what happens to you? j: i don't have any money. i don't have money saved. i don't take a paycheck. lemonis: couldn't you just go to your dad or your grandma? j: no, me and my dad are hardly on speaking terms. -lemonis: because of the money? -j: yeah. lemonis: how much do you end up having to take out a month just to kind of keep your head above water? j: probably about $3,500 or $4,000. -lemonis: in cash. -j: yeah. lemonis: what's the total revenue of the total business, overall. j: well, last year was $1.4 million. right now, we're at $1.1 million, and it's august. -lemonis: $1.1 million? -j: yeah. -lemonis: this location? -j: no, all of it. lemonis: all three -- everything combined. and how much will it lose on paper? j: right now, it's not losing anything on paper. basically, that sales tax -- not paying it, that's what's making it break even. lemonis: hit "run report". meals and entertainment, $25,000 -- what's that? j: for, like, we go out to dinner. do things, like, that goes on that. lemonis: so you're running it through the business? j: yeah. lemonis: do your lenders know that?
j: no. lemonis: $134, $116 -- amc. -is that the movie theater? -j: yeah. lemonis: you went to a movie, like, about lobsters, or... -j: i don't know. -lemonis: amc, amc, amc, amc, hugo's, amc. what's this one for $358? sunda -- a very expensive sushi place. you know what the unfortunate thing is? i live here. hub 51? -j: yeah. -lemonis: $194. another movie. anoth-- jesus. j: it's my only relief i get sometimes. lemonis: i know, dude, but honestly. i mean, brother, i got to tell you something. j: hmm? lemonis: i'm not feeling so bad for you. you're taking out $3,500 a month in cash out of the business, and you're going to morton's and hugo's and going to the movies all the time. -j: yeah? -lemonis: and so this is not fair to the people that -- i mean, if i do a deal -with you, do i have to... -j: no. lemonis: ... be thinking that you're gonna be going -to the movies on my money? -j: no. lemonis: in my mind, as i sit here, what i feel like is,
"let me call marcus to see if he'll put some money in to kind of continue this lifestyle." i'm not that far off, am i? j: no. lemonis: you need some discipline is what you need. i was so aggravated by what i was finding that i just needed to get some space and take overnight and just think about it, because i was pissed. the fact that you just told me that i wasn't that far off was not a good thing. i was hoping you were gonna try to convince me that i wasn't right about the fact that you called me here so that you can continue this lifestyle, because as an outsider -- j: it's not me wanting to continue the lifestyle, i was saying you were right that i need your help. why, so that you can continue to go to hugo's? j: [ scoffs ] lemonis: i'm gonna tell you right now, it's [bleep] up. and i apologize for cussing, but, man. ♪ when i left da lobsta last night, i had no intention of making a deal with j.
j: how you doing? good to see you again. lemonis: but there's a lot of people that work there -- a lot of people that invested money in this business. i felt like i just needed to hear him out to see if there was anything worth salvaging. i wanted to kind of maybe just have just a you-and-me bull[bleep] session for a little bit on kind of what happened yesterday. j: i feel like we weren't on the same page on some things. lemonis: the perception for me, yesterday, is that you weren't being straight with me. it's probably the same perception -that your dad has, right? -j: mm-hmm. lemonis: and so we have to fix that behavior. why don't you talk to your dad anymore? j: one night, i'll be honest, i just -- i was in the middle of building the river north store. we were so cash-strapped, 'cause the store was way over budget. i was using cash flow. it was the middle of the winter. i mean, i just kind of went off on him over the situation. i tried expressing to him that i really am trying to do everything to ultimately get his money back. i just need time. and he just didn't, you know, quite understand that. lemonis: understand that or believe it? j: believe it. it really bothers me. it's...
he didn't even come to my own wedding. like, that was -- that was horrible, so... lemonis: he didn't come to your wedding. j: [ sniffles ] [ voice breaking ] so i just need this company to fulfill that promise. i want to make this big enough where his shares are worth something that makes up, if not more, for what he gave me. or i make enough out of it where i can repay him somehow. lemonis: in hearing jay talk about his lost relationship with his dad and him wanting to pay him back, he was accepting responsibility and i think that's what i really wanted out of him. he was deserving of a second chance. just based on our little conversation here, you're a guy that wants to have a relationship with his dad. you want to fix that. you want to have a successful business. i feel like i learned more about you. and your honest conversation helps me do that. -j: thank you. -lemonis: okay. ♪
-j: how you doing? -lemonis: good morning. -j: good to see you. -lemonis: how are you? what's the good word? j: pretty big day. lemonis: the reason that i came here is 'cause i like the idea. -j: right. -lemonis: it's in my hometown. i saw the people standing in line at the food truck. there was nobody else there that had a food truck like that. i have a product that i think has a lot of potential, and it's a model that could be scalable. what i didn't know is that you didn't put any money in and you were taking money out for more than just your cost of living. most entrepreneurs have some skin in the game. this skin isn't everybody else's skin. they have some of their own skin in the game. j: most importantly, i want to pay those people back. i want to make good on it. lemonis: and i'm willing to help you figure that out, so i'm willing to make an offer. -j: okay. -lemonis: my offer's $210,000 for 51% of the business. it requires you to sell this location,
to use those proceeds to pay down the sales tax. it requires you to go on a payment plan to pay your dad back and to service this other debt. one of the other things that i would want to do is put you on a normal salary. my confidence level in your ability to not put your hand in the cookie jar is low. and so you're gonna have zero access to the cash. ♪ if your business is in trouble and you need my help, log on to..
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lemand so you're gonna $210,000 have zero access to the cash. j: what salary would you be putting in place for me? lemonis: whatever you got last year. i don't want to pay you less. i don't want to pay you more. j: $60,000 is what i took, so that's not what take-home pay would be. lemonis: that's not my fault you didn't pay taxes. i'll pay you the $60,000, but i'm 100% in charge. j: i put too much in to give up full control of the company. lemonis: why do you think you should have operational control? so you think going out for elaborate meals and taking cash is consistent with being a good steward of the business? why do you think you should have -- is it a pride thing? j: sure. lemonis: 'cause if this sales tax doesn't get paid, they're gonna lock the door and there goes your pride. j: i know for a fact i can operate my company.
lemonis: i mean, i'm not gonna budge off 51%. we have a deal, yes or no? j: i don't want to give up 51%. lemonis: your answer is "no". j: yeah. lemonis: okay. j: it's not that i'm not respecting you or your opinion. lemonis: no problem. what's obvious to me is that in this moment where j has an opportunity to do what's right for the business and for the people that have put money into the business, he chooses himself. and that's where pride turns into ego. nice meeting you, i wish you a lot of luck. j: thank you. lemonis: okay? there are plenty of people who do not deserve the help, like j wolf, 'cause they're unwilling to change or they're ungrateful or they just don't respect the process, but there are other people who do deserve a chance, like this woman who reached out about 500 times. betty harris is the owner of betty's pie whole --
a pie shop based in encinitas, california, specializing in both sweet and savory pies. betty: do we have chicken pies? shay: they are out on the rack. lemonis: a veteran of the restaurant world, betty started her own business nearly 10 years ago and soon gained a loyal following. the shop consistently made money, but after she opened up her second location, her fortunes began to change. betty: it's just gotten away from me. i don't have a lot of time. lemonis: i'm already in the sweets business, but the savory pie market is growing in popularity. it offers a new opportunity to market pies as a meal rather than just a dessert. with my expertise, i believe i can help betty out of this spiral and get this once-profitable business back on track. betty's seemed to be nestled amongst this garden-supply space with several other businesses.
i've never seen anything like this before. if you're looking for a place to be a destination, this is it. ♪ looks like people came and bought everything already. woman: mm-hmm. it's very popular. lemonis: 11:30 and it's empty. woman: i've come here twice in one day just to get the next selection. lemonis: you've come here twice in a day? -woman: oh, yeah. -betty: hi. lemonis: you're betty? how are you? i'm marcus. betty: my god. how are you? lemonis: really nice to meet you. i did not know what to expect when i came here. it's really cool. betty: oh, it's, well, it's a little -- it's warm. lemonis: and so is this the whole place here? betty: no, there's a whole dining room in there, too. lemonis: have you always been a baker? betty: it's just something i always did. and i was kind of a latch-key kid, so i had to come home and get the chicken in the oven by the time my mom got home. -lemonis: okay. -betty: [ laughs ] lemonis: so, today, you're operating two locations. what will this place do in total sales?
betty: i mean... [ sighs ] sales... lemonis: that's like, when you ring the register. betty: i think maybe like $400,000. lemonis: $400,000? -betty: yeah. -lemonis: that's a lot. and what does the other place do in sales? -betty: $600,000? -lemonis: $600,000? betty: somewhere around there, yeah. lemonis: so, does this location make money? betty: some months, but overall i would say no. lemonis: okay, and does the other location make money? betty: definitely not. lemonis: and how much does this lose? betty: i think last year we lost 500 bucks. -lemonis: this place? -betty: yeah. lemonis: so you're a couple pies away from making money? -betty: apparently. -lemonis: and the other place? betty: last year, it was 50 grand. everybody was like, "you're gonna double your money. you're gonna make so much money. oh, my god. that's a better space and you can make so much money." and so i was like, "oh, my god. making money -- this is so great. but i haven't taken a paycheck in over a year. lemonis: okay, can you give me a tour of the back? betty: okay. this is the kitchen. ♪
lemonis: hi, guys. how are you? -man: how's it going? -lemonis: who's the manager? -you are. -shay: yes. -lemonis: i'm marcus. -shay: shay. lemonis: shay. nice to meet you. shay: all right. nice to meet you. lemonis: so when i came in, you know, it's the beginning of the day. why is the case kind of empty? shay: 'cause we can't produce enough. lemonis: why? shay: today, we're lucky we have three ovens working. lemonis: what, sometimes the ovens don't work? betty: yeah. lemonis: do you ever have a line out the door? shay: yes, we do. lemonis: and you run out within the first couple hours? -betty: yes. -lemonis: when you see the fact that they're sold out of product and the business is not being able to satisfy the demand, it's obvious to me that you don't have a sales problem. you don't have a demand problem. you have a production problem. shay: this, right now, is our only consistently working oven. -lemonis: that's not good. -shay: as you can see, our sink is cellophane wrapped and rubber banded together. this does not work. lemonis: so half of the equipment in here doesn't really work. shay: mnh-mnh. lemonis: is elizabeth a good boss? shay: she's incredibly talented. lemonis: but is she a good manager?
shay: no, not managing the business. no. i think maintaining the finances and managing us -- it's too much. lemonis: can we try the pie? betty: yes. that's grandma lucy's chicken pie. lemonis: chicken pot pie is amazing. -betty: thank you. -lemonis: which one's that? betty: the "eat your greens". lemonis: mm-hmm. this dough feels doughy, as opposed to flaky. -betty: okay. -lemonis: do you have, like, a recipe book for all this stuff? betty: i don't need a recipe. i winged it. winged it, and it's not the best way to do it. -it's really not. -lemonis: no? -you don't think so? -betty: no. lemonis: if these recipes aren't written down, what's gonna ultimately happen is you're gonna have an inconsistent product. and inconsistency isn't gonna encourage people to make visits every month. at some point, every time they come, the pie's different? they're gonna stop coming. betty: it's my passion -- it's just like finding new recipes. and my mom baked -- always.
lemonis: and what did your mom inspire in here? betty: "rosalee's fancy pants pie". lemonis: are you close with your mom? betty: i mean, yeah. i mean, she's my mom. i don't know. yeah. lemonis: that feels like an odd answer. betty: no, no. she's far away. -don't make me cry. -lemonis: where does she live? betty: she lives in texas and i can't go see her. lemonis: why? 'cause i'm here. i haven't seen her in years. and she can't afford to come here and i can't afford to help her at all or buy her tickets or do anything. lemonis: when's the last time you saw her? betty: probably 2009. lemonis: wow. betty: yeah. and i was supposed to go out and i just couldn't go. i don't have a lot of time. aw, man. lemonis: come on. sit down. betty: i just -- i don't need to be a billionaire here. i don't need to be wealthy. i just want some peace. i just want some time, and i'm not afraid to work hard.
and i will listen to everything you say. it's just gotten away from me. [ sniffles ] and clearly i'm doing something wrong. lemonis: i don't know about that. the pies were pretty damn good. betty: [ sniffles ] i'm a bit of a negative nancy at times. lemonis: no, you haven't been negative. betty: i'm trying to be -- i'm trying to use "the secret". but i'm secreting sometimes instead of using "the secret". so... it's like you're the prophet, and i'm the nonprofit. this is so amazing. it's like worlds collide. lemonis: now that i've checked out her flagship location, i want to check out her other shop -- the one that she tells me is losing money. and right away, i see problems because it's called elizabethan desserts. it doesn't look anything like betty's pie whole. what is this? betty: give me a chance! it's not "top chef". lemonis: 'cause you're not a top chef. -betty: wow! -lemonis: i'm done.
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♪ [ indistinct conversations ] lemonis: what is this? why is it so different? betty: because that's pies and this is cake. we do wedding cakes, birthday cakes. lemonis: i got to be honest with you, i'm super confused. -betty: really? -lemonis: mm-hmm. i thought this was gonna be like a second location that felt similar. betty: oh, no. no, no. i wanted them to be very different. lemonis: and how much is the rent? betty: with everything? $6,400 a month. i know.
-lemonis: in a shopping center? -betty: yeah. lemonis: you see, the other place has a sort of country charm to it and it feels like a destination to me. this feels like a strip-mall bakery. nothing special about it -- forget the fact that she's paying exorbitant rent and losing over $50,000 a year. betty shouldn't have opened up elizabethan desserts in the first place. she's spreading herself over two places, but getting neither of them right. i feel like i've gotten a good sense -of what's here. -betty: yeah. lemonis: so i'm gonna meet you back at the other place. we'll go over financials. -betty: i have them -- some. -lemonis: good. i'll meet you back at home base, okay? ♪ -so are these your financials? -betty: yes. lemonis: the financials that you're showing me are for the first half of 2015. betty: okay. lemonis: there are two businesses here. there's betty's pie whole and there's elizabethan desserts. and this location, betty's pie whole, has done $256,000 worth of business. it has a 71% margin, which is pretty good.
actually it's really good. betty: i like it when your eyes light up like that. lemonis: great job. your employment costs are $152,000. they're 83% of your gross profit. betty: [ gasps ] lemonis: which means that you're not getting enough revenue. -betty: agreed. -lemonis: ...for the number of people that are here. instead of them making pies that get you to 5:00 and generating the revenue, they're making pies -- 'cause its so inefficient and machines are broken -- that's getting you to 2:00. but it's the same amount of labor producing not enough. so far this year, betty's pie whole has generated $256,000 from selling pies, leaving her with about $182,000 in gross profit. but those profits are almost entirely eaten up by her labor costs of $152,000. it's not because she has too many employees. it's because the employees are working in an inefficient environment. if we can fix betty's process and stock her kitchen with equipment that actually works, we could double or triple her pie output
without any increase in labor, leaving the store comfortably in the black. so at the other location -- $303,000 of revenue. your total expenses there are $226,000 for the first half of the year. your expenses here are $189,000. here you've lost $6,000. there you've lost $17,000. i think the bigger issue for me, elizabeth, is there's only one you. and business that's doing better is not getting enough of your time. betty: yeah, yeah. lemonis: you're spread too thin. betty: and i'm doing terrible. lemonis: you're actually not doing terrible. this is a very charming destination. it feels like an interesting restaurant concept. so i'm willing to make an offer of $75,000... betty: wow. lemonis: ...for 25% of the business. i can tell you that i'm going to solve working capital so there's money in the bank. i'm going to fix the process in the kitchen
so that the labor can actually produce the volume of product that i think it needs. betty: i mean... lemonis: you want to think about it? i don't want to pressure you. betty: no, you're not pressuring me. it's like you know the right thing to do, but then it's like, "uhh..." lemonis: so do you accept my offer? betty: okay. lemonis: congratulations. i'll see you tomorrow morning. betty: really? you're gonna come back? -yay! -lemonis: well... betty: i didn't know were gonna come back tomorrow. lemonis: i just gave you money. of course i'm coming back. betty: okay. so you're 100% in charge. -lemonis: congratulations. -betty: thank you, sir. ♪ lemonis: good morning. -shay: good morning. -man: good morning. lemonis: my name is marcus lemonis. yesterday, elizabeth and i made a deal for me to put $75,000 into this business, and i'll own 25% of the business. you can expect the entire process in here to change dramatically.
how many of you have seen the recipe book and studied on it and been trained on it? you been trained on the recipe book? that's because there is no recipe book. we're gonna upgrade and improve the process and the equipment so that the same amount of people can make enough pie to not run out at 2:00. on a scale of 1-10 -- "10" being laser-focused, "1" being all over the place, describe her. 1-10. shay: all over the place. lemonis: so that's a 1. -shay: i would say a 3. lemonis: a 3. man: i think 3 sounds pretty accurate. -lemonis: 3? -man #2: 3. -lemonis: 3? -woman: 3. -lemonis: 3? -man #3: 3. lemonis: betty's struggling to manage this place, let alone her second place, which has been a drain on her time and her money. so for now, i want her to focus on this location and this location only. while you guys have done a good job, you've really had no leadership. i believe that you guys have the heart and the passion for this place. i think the product is really good in most cases. i'm asking you to trust the process.
let's get to work. thank you. ♪ i want to re-imagine the "eat your greens" pie, and i want to make a couple variations of it. i want you to write a proper recipe and i want you to document the changes you made. -betty: do i go now? -lemonis: right now. -betty: okay. -lemonis: you're on it. lemonis: i have no doubt that betty can make pies. the reason that i wanted her to make variations of the pie is to also learn how to write things down so that any member of her staff can make the exact same pie. -how we doing on those? -betty: uh... lemonis: these are two of them. where are the other two? the biscuit dough -- i'm working on. this is a chive dough, and then this one is like a flaky garlic. lemonis: where did you write all that down? betty: uh... i took our base flaky dough and i changed it. lemonis: and so where is that documented? betty: no, i remember it. it's the same process, but just a variation on ingredient -- that's all.
♪ the look in your eye makes me nervous. ♪ lemonis: well, the look in my eye is for the last two that you have nothing written down. how many ounces is the bottom? betty: 2.5. lemonis: and what did it use to be? betty: i'm sorry, the bottom -- oh, no, i did reduce the bottom. the top was 2 1/2, so what i'm gonna do is -- this was 2.5 and then this is going to be reduced. lemonis: one thing that drives me crazy about betty is that she's basically just winging it all the time. in my opinion, i think that's what got her in trouble. "let me wing it by opening up another location". it's like everything with her lacks a plan. i haven't been this frustrated in a very long time. betty: give me a chance! it's not "top chef". lemonis: 'cause you're not a top chef. betty: wow, marcus. lemonis: top chef would have their [bleep] together. they would know what they did. they would write it down. they would have a plan. they wouldn't just be winging it all the time. betty: i'm not winging anything. lemonis: okay. i'm done. betty: what does that mean? i don't know what you want me to say there, marcus.
so does that mean done for the day? that mean done for...ever? does anybody know? lemonis: you have to trust the process. and so... betty: no, don't you throw that heart. don't you do that now. come on, now. [ gasps ] other wireless carriers make families share data. some way to say happy holidays. switch to t-mobile now and get up to 4 lines with up to 6gb each. just $30 bucks a line, that's 6gb each
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does anybody know? lemonis: betty struggles to follow a process, because she's so used to blazing her own trail and doing her own thing. and so when you expect her to do something that she says she's gonna do and she doesn't, not only does it violate the relationship, but it puts the business in jeopardy. do you know why i walked out? betty: i'm trying to understand. lemonis: i don't think you're as organized as you should be. i know that there's a ton of talent inside of you. i know that you have the ability to be a badass. i know it. in order for us to move forward, you have to trust the process. the one thing that is crystal clear to me is what betty needs is laser focus. she needs to become far more one-dimensional. so here's what i'd like you to do. i'd like you to go through this place and clean out anything that you don't need. i just have interest in you having a singular focus. -do you need this? -betty: yes, definitely. -lemonis: what for? -betty: ice cream. lemonis: so now you're an ice cream manufacturer? betty: no, we just make it.
obviously people want ice cream and i feel like it's -- lemonis: you have to be the one that makes the ice cream? lemonis: i think that it's a good -- yeah. i think people really love that. they love it. lemonis: focus, focus. this is not betty's ice cream whole. this is a savory and sweet pie shop. and so... betty: no, don't you throw that heart. don't you do that now. come on, now. [ gasps ] ♪ -lemonis: hey, elizabeth. -betty: yes. lemonis: i want you to meet somebody. -betty: oh, hi. -lemonis: his name is mark. mark: nice to meet you, elizabeth, how are you? lemonis: mark is with an equipment company that i've used for all of my kitchens. -this kitchen's gonna shut down. -betty: ooh, okay. lemonis: and all new equipment's coming in. let's start the process, okay? now that we've started the construction over at betty's pie whole, we're gonna take a ride over to elizabethan desserts. there's some serious business that has to be finalized. i love to buy businesses.
i love to invest in them. i love to have them. betty: you're great at it, yeah. lemonis: but when they don't work, i'm the first to admit it and i'm the first to shut it down. betty: i ju-- lemonis: this place is costing you money. you can't spend your time chasing things that just don't work. every idea can't be a good one. -it's just not possible. -betty: i agree. lemonis: then why don't you shut it down? betty: because i know that the potential is there. lemonis: three years later? betty: i think both can be done. lemonis: pick one. you run one place and you kick ass with it. you get a life. at some point, you see your mom. everybody that works here still works. or you keep going this way and they both close 'cause you run out of money. you asked me, "please don't go. i'll do whatever you want." betty: [ groans ] [ sighs ] lemonis: it's closing. betty: when? lemonis: today. -betty: today? -lemonis: mm-hmm.
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the twins. aunt alice... you didn't tell me aunt alice was coming. of course. don't forget grandpa. can the test drive be over now? maybe just head back to the dealership? don't you want to meet my family? yep, totally. it's practically yours, but we still need your signature. hurry in for great deals all black friday weekend on select new volkswagen models during the sign- then-drive event. betty: [ crying ] -hi. -lemonis: hi. i'm sorry you feel this way. i am. i was sad when i found out there was no santa clause -lemonis: i'm proud of you. -betty: oh, god. lemonis: but i appreciate you being strong enough to push through it. i know you're sad, but i think you're relieved, too. betty: yeah, it's like you broke up with your boyfriend or something. lemonis: i think the boyfriend you broke up with was basically taking about $50,000 a year from you. betty: ah, criminy. lemonis: probably good that he's gone, right? betty: it was a silver lining i suppose.
lemonis: we need to be focused on moving forward, so let's lock it up, okay? nobody in business, including me, likes to fail, but it happens and i think the best way to deal with it is to accept it and to learn from it and to move on. closing the elizabethan dessert store down is a giant sacrifice of pride, but that's the only way that betty's is gonna be successful. ♪ over the past two weeks, a lot of work's been done here. i've added new workstations with solid-wood tops. it allows us to work more efficiently. i've gotten rid of all the old equipment and replaced it with state-of-the-art ovens and mixers. we've added new display cases that highlight our product. now it's time for betty and her employees to fill this place with product. betty: i'm gonna be really specific in the recipes for you. and that way you can be sure to reference that. man: yeah, yeah. lemonis: i think the improvements have boosted morale.
with the kitchen less cluttered and the equipment working flawlessly, the staff can be a lot more efficient. and i think that ultimately breeds success. betty: your stuff's melting, honey. this heat affects our ice cream. lemonis: she's still making ice cream? betty: no -- no. lemonis: sure enough, i walk into the freezer and what do i see? ice cream that she made. when did this get made? betty: a week ago? lemonis: why would it get made a week ago? betty: 'cause we had to have some ice cream. lemonis: but we got rid of the ice cream machine. where'd you get it? betty: from the ice cream machine. but should we not have any ice cream to go with pies? lemonis: where did the machine come from? because i was putting it out -- betty: i don't know where it is now. i swear i don't. lemonis: did you bring it back in after i left? betty: i don't think you put it back out. lemonis: i definitely did. i even put it right there with all the other stuff that was going away. -betty: i don't remember. -lemonis: betty. could you just admit to me that you just didn't do it 'cause you don't want to? betty: i don't want to. [ laughs ]
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u just admit to me that you just didn't do it 'cause you don't want to? betty: i don't want to. [ laughs ] you're right. i do feel that we should make our own ice cream. i feel like it's part of what we do. we make things from scratch. people love the fact that we make it here and we use local eggs and we're using pure ingredients. it's less processing, and if you don't agree -- okay. lemonis: it's not that i don't agree. i didn't agree when i left, and then you and i had an understanding,
just like you had an understanding that we were gonna buy all-new equipment. and so i can't be in a one-way relationship where you ask me to do things and i do them out of respect for you. and i ask you to do something, it's like it didn't matter enough for you to put the effort in it. it's just about the relationship and trust. betty: okay. i don't think betty's used to people helping her. you can read on her face that she's struggling with letting go. change is hard for people. i know that her heart is in the right place, she just can't get her head around this yet. i'll give you everything that you want, as long as we are always on the same page. betty: okay, i'll take the ice cream machine and i won't make any more except at my house, just to eat. lemonis: so you're gonna take it home. -betty: i'll take it home. -lemonis: okay. betty: is that okay? can i have it at home? lemonis: what you do in your own home is your thing. betty: i'll try to fit it in someplace. i'll put it in the garage. ♪ lemonis: hi, everybody. shay: hi.
lemonis: betty's is finally ready to reopen. hi, how are you? welcome. woman: can i get two of those little -thanksgiving individual pies? -betty: absolutely. woman: they're so pretty -- all of them. woman #2: hi, how you doing? -betty: bonjour. -woman #2: bonjour. -lemonis: how you doing, buddy? -man: doing good. -lemonis: how's it feeling? -man: good. learning how to adjust with the new ovens. lemonis: oh, 'cause you mean they're cooking on time. man: a lot quicker. lemonis: and so does that mean you're able to get more pies out in less time? -man: yeah. -shay: yes. lemonis: and so you should be able to pump out twice as many chicken pot pies, twice as many pumpkin pies. you look around this kitchen and you feel people functioning in their lanes. pies are being made and pies are being prepped. it seems organized and streamlined. people seem happy and energized and, more importantly, they're pumping out a lot of pies. betty: what are those? oh, my god. this is so weird. [ both laugh ] lemonis: whole savory pies. betty: look it. chicken.
lemonis: so this is the chicken pot pie recipe. you're telling them what's inside and exactly -how to do it. -betty: yeah. lemonis: this is really all i ever wanted. betty: yay! me, too! it's all i ever wanted. lemonis: everything seems to be in order, but i still have one final thing that i want to check on. where's the ice cream? she's finally following through on the things that she said she was gonna do, like have ice cream made by somebody else other than her. betty: this is gelato vero and it's in mission hills. -lemonis: is it good? -betty: it's really good. lemonis: are you struggling with not making it or are you kind of over it? betty: i wish we could, but i understand and i'm listening to you and trusting the process. i know the journey to get here from me closing down elizabethan to me taking away the ability to make ice cream, were all painful steps along the way. and change is never easy for people. what's been the best part of the process for you? betty: i work through it. it makes me a little bit tougher. i feel like i went through boot camp -- lemonis boot camp.
what's this? plane tickets. [ laughs ] lemonis: who you gonna see? betty: my mother. and a hotel, too! [ laughs ] lemonis: i think this is the first time i've seen you speechless. today, betty has one brand and one business, allowing her to focus on what she does best -- turning out amazing sweet and savory pies. even better, she has more time, especially to visit her mom. in looking at how happy she is, i feel like we've nailed it. betty: [ chuckles ]
♪ lsammy:: this is where the magic is.... lemonis: ...a burger business in new york city... tranchina: don't be shy with the sauce. lemonis: ...built by four best friends... sammy: we had a dream. we had a [bleep] passion. i don't know where the [bleep] it went. lemonis: ...who now can't get along. sammy: so, why the [bleep] wouldn't you open up the restaurant on time? -that's [bleep] -tranchina: hey! that's enough! lemonis: it's a dire situation... sammy: i build it for my brother, for my family. [ voice breaking ] i feel i failed them. i really do. [ sniffles ] lemonis: ...compounded by lagging sales and mounting debt. how much are you losing? covello: $5,000, $6,000 a month. lemonis: if these guys can't get on the same page, it's just a matter of weeks before this business goes belly up. todd: if we don't fix the problem, we're gonna have to close the doors. lemonis: new york city has a ton of energy,